HOLACRACY


For those unfamiliar with the latter term, holacracy is one of the latest & hotest models of organizational structure. Its core concepts are:

  • Decision-making and authority are deemed to be distributive: The structure, built on groups or circles, is a mix of:
    • Linking pins; theorized by Likert* more than 50 years ago; a forerunner of psychology into management.
    • Autonomous teams; which emerged after WWII and developed by Trist*, one of the organizational development fathers, himself heavily influenced by Lewin*, a pioneer of applied psychology.
  • People are mission-driven rather than sitting in concrete-style roles.
  • Communication is agile**: stand ups…

No Wonder that, with such a definition, holacracy attracts many entrepreneurs & managers, young or not.

Holacracy comes from holon, a Greek word used in philosophy to describe something which is, at the same time, the whole thing and a part of it.

The term was used by Koestler* in 1967 but has regained interests since Robertson’s* release in 2010. Koestler

was influenced by Simon*, the Nobel-prized father of “bounded rationality”.


New prophets see holacracy as the answer to the “Mephistophelian” model of taylorism, its pyramidal structure, & other evils of "typical" management.

Back to anthropology

Anthropology tells us that the pyramidal structure has been far from invented by the Industrial Age. Over the world, all societies have used it since primitive times. It is one of the basic elements of any group structure: families, tribes, “brotherhoods” of all sorts, religions, governments…

 

Leaders bring their groups from one state to another through orders ruling the members’ behavior. “Orders” may look too strong as the directions are often given very informally.

Thus,orders are not very different from norms. The main difference is that norms apply to the maintenance of an established behavior while orders apply to future changes in behavior.

 

Authority, like control, is always a matter of the decision made by people to whom it applies. It is contrary to ordinary beliefs, that authority is “built-in” leaders & flowing from them. Any regime rests on the accord of the administered.

 

Thus, some activities need such a pyramidal model, some don’t. It is an error of a “one-size-fits-all” approach. But to create a new concept & to be revolutionary, one has to emphasize on “breaking the old mold”. That is why holacracy experts shoot Taylor down.

Program management in disguise:

Autonomy, the “no boss” idea, is very tempting for many people: it is synonymous to total freedom and “kill that bastard who judges me so unfairly”.

Yet, Freud has already found out that the desire to kill the father, or the ruler, had to be overcome if you wish to develop properly. Furthermore, & by definition, total freedom does not exist when you live / work with others. Even a sadhu is not free from the group he separates himself from; as cultural rejection can only exist as a reaction to a culture.

However, [semi-]autonomous teams have proven to be efficient in some specific cases. One of them can be

linked to holacracy: the trial-&-error search.

 

Holacracy is in fact program management in disguise: You know where to go but you haven’t yet a clue of how to get there. Trial-&-error allows you to search the environment to find a solution.

In that process you learn. And this is where the holacracy model stops: Holacracy is only a search engine. Once it gets its answers, it turns to find something else.

So unless you are a research center (ok), a brand new start-up (so-so ok) or a clueless marketeer (not ok), holacracy won’t be for you.

The limit of holacracy is that it can only be an intermediary stage to go as you learn. Its force is that such a stage will help a company to grow from a simple to a complex organization: it is a transitional, yet stable, step, like a chrysalis.

Managing by Trust or by Transparency:

To function, trust & autonomy must be the cornerstones of holacracy. But that is not a differentiating factor: evidently, trust is at the core of any company, if not of any human interaction.

 

Indeed, to trust someone is to make a decision. It’s a risk or an opportunity. To do so, one must understand the ecosystem, the social system in which the decision is made. It depends on the contribution & alignment of all stakeholders. This point is even more important nowadays as many people stay in their jobs 3 years in average and that most companies (including the very large ones) live less than 30 years, which is less than the working life of the individuals it is composed of.

 

360°-Trust (top-down, bottom-up or peer-to-peer) is one of the success' keys for today’s business, from start-ups to large corporations.

But trust is not transparency. In fact it is rather the opposite. To trust is to understand that there are things you don’t know and you rely on others knowing them.

That is why IT is currently critical as it develops tools which impose transparency to facilitate trust while not undermining accountability.

Be careful, however, of the Orwellian temptation: tools once in place may give the illusion of a control never reached before by the “top” part of the decision organ and may transform “less strategic” decision actors, who are more numerous & more in contact with day-to-day business (middle management & execution centers), into simple relays. Information going upward will [still] be biased further to take into account such loss of authority but not of accountability.

From Kevin the Teenager to Al Capone

“Common” organization is back with a vengeance. Today, holacracy looks like teen-age’s rebellious rejection

of authority. It is an escape to an ideal group, a brotherhood of peers, who will not judge but “do things” together.


The inherent flaw is that for a group to cohere it automatically creates norms based on recurrent behaviors. The members adhering more closely than any other members will become leaders, informally or not, and some horizontal relationships will shift vertically.

The twist in the holacracy’s tale, as many studies from sociologists demonstrate it, is that reactive groups created against any formal authority, like criminality against any established society, will tend to be over-organized rather than under-organized.

* : For bedtime readings :

Koestler: The Ghost in the Machine,‎ 1967.

Lewin: Resolving Social Conflicts, 1948.

Likert: New Patterns of Management, 1961, & The Human Organization, 1967.

Robertson: Holacracy Constitution, 2010.

Simon: Administrative Behavior, 1947, & (w/March) Organizations, 1958.

Taylor: Principles of Scientific Management, 1911.

Trist (w/ Sofer): Exploration in Group Relations, 1959.

 

**: Agile management model was born out of IT design & development.


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